Business Directories

Tearful Toyoda apologises; Japan hopes for recovery

Washington, February 25, 2010

Toyota Motor Corp President Akio Toyoda apologised to US lawmakers probing the automaker's safety record and ended the day in tears.

Toyoda, peppered with questions about a massive recall that has rocked Toyota's reputation, told lawmakers he was "deeply sorry" for accidents and injuries involving its cars.

He said Toyota had lost its way during a period of fast growth but vowed to steer it back to the values that made it a watchword for quality.

Cheered by Toyota plant workers and dealers at an event organised by the automaker on Wednesday evening in Washington, Toyoda broke into tears under a giant display bearing the name of the company that his legendary grandfather founded.

"I believe that Toyota has always worked for the benefit of the United States," Toyoda said. "I tried to convey that message from the heart, but whether it was broadly understood or not, I don't know."

He also offered a sober assessment of the challenges still ahead: "We at Toyota are at a crossroad. We need to rethink everything about our operation."

Toyoda's appearance in Washington marked a dramatic peak in a safety crisis that broke a month ago with a series of recalls over unintended acceleration and braking problems that now include more than 8.5 million vehicles globally.

Politicians in Japan are worried about the potential fallout from the crisis. Toyota, with a market value of about $125 billion, is at the the heart of a massive supplier network that is vital to the economy's health.

Investors, who have knocked about $30 billion of its market value in the past month, appeared to view Toyoda's hearing as a step forward. Toyota's stock rose 0.6 percent in Tokyo, outperforming a slight fall in the broader market.

"It was good that the Toyota president himself appeared before the panel and testified," Prime Minister Yukio Hatoyama told reporters in Tokyo on Thursday.

"I don't think this marks the end of everything. He spoke of working to make improvements. This is a matter involving cars, that affects people's lives, so the important thing is pay close attention to safety and to fulfil its aim to make improvements where they are needed. I'm hopeful and I think they will do so."

Japanese Trade Minister Masayuki Naoshima said Toyota's problems could have an impact on the image of Japanese products and that he wanted the car maker to win back consumer trust.

The costs of the recall are set to grow with an agreement with New York state to speed customer repairs and provide alternative transportation, a pact likely to expand to other states.

Toyoda's efforts to reassure US officials and consumers were undercut by a confrontation over a 2009 memo in which Toyota boasts of saving $100 million by persuading safety regulators to accept a relatively cheap recall of floor mats implicated in the unintended acceleration.

Dressed in a gray, pinstriped suit, Toyoda said he, more than anyone, wanted Toyota cars to be safe. "My name is on every car," he said in English before using an interpreter to answer questions.

But Toyoda rejected the possibility that some of the acceleration problems are in the electronics rather than the recalled sticky accelerator mechanisms and floor mats that can trap the accelerator pedal.

Chris Gidez, director of risk management and crisis communications at Hill & Knowlton, said Toyoda gets points for coming from Japan to testify and judgments will not be made in just one hearing. "This is going to be a marathon for Toyota." - Reuters